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Advancing Your Specialty Strategy Utah Health Insurance Association 2016 Specialty Value Story Presented by: Laura Licari, PharmD, RPh Clinical Advisor January 6, 2016 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary Agenda 1. The Challenging Health Care Environment 2. Advancing Your Specialty Strategy with Condition-Level Trend Management 3. Advancing Your Specialty Strategy with Complete Patient Care 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 2 Specialty Continues to Grow: By 2018, It Will Represent 50% of all Drug Spend1 TOTAL INDUSTRY SPECIALTY SPEND1

KEY FACTORS DRIVING TREND 50% of total drug spend Half of spend under medical benefit with limited visibility 30% of total drug spend 2012 Medical Benefit Increasing utilization Aging population Robust pipeline Expanding indications Increasing prices Brand drug price inflation Higher cost for innovative drugs 2018 Pharmacy Benefit

Source: NHE, Artemetrx, CVS Health Internal Analysis, 2013. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 3 Increasing Utilization of Specialty Drugs Three Key Drivers 2011-2014 + New Drugs 88 New Indications 110 + Aging Population 6x PMPM costs for older patients = Increasing Utilization

Utilization Trend Rxs per million members per month Source: CVS/caremark Enterprise Analytics, data 2011 through 2014. PMPM (Per Member Per Month). 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 4 Increasing Specialty Drug Prices: Annual Inflation and Higher Launch Prices AWP INCREASES ANNUAL PRICE IN THOUSANDS Harvoni 9.8% Sovaldi Viekira Pak Revlimid 8.5%

14% CAGR Tecfidera Incivek Tasigna Tysabri Enbrel Copaxone 2010 Humira Cimzia 2014 Source: CVS/caremark Specialty Analytics. Annual drug costs based on average wholesale price (AWP) accessed summer 2013. This slide contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health and/or one of its affiliates. Source: CVS/specialty 2010-2014 book of business. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 5

3.6% Total Health Care Spend 25% 11% All other medical costs 1% All other drugs 5% Specialty condition: other medical costs 8% Specialty drugs Specialty Patients Using

Specialty Drugs Specialty Portion of Total Health Care Spend Specialty Drugs are Nearly One Third of the Total Cost Source: Milliman Specialty Medication Benchmark Study, 2013 analysis of 2011 data. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 6 Agenda 1. The Challenging Health Care Environment 2. Advancing Your Specialty Strategy with Condition-Level Trend Management 3. Advancing Your Specialty Strategy with Complete Patient Care 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 7

Traditional Approach Manages Price and Utilization for Individual Prescriptions DRUG-LEVEL APPROACH Review Diagnosis 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 Review Prescription Important but Incomplete 8 Condition-Level Example: Addressing Unique Opportunities Based on Specific Patient Needs Newly diagnosed New to RA; prescribed infused drug before other self-injectables DRUG-LEVEL APPROACH

Review Diagnosis Review Prescription Is Remicade appropriate treatment for RA? Are there any contraindications for Remicade? Advanced disease CONDITION-LEVEL APPROACH Try generics first Preferred selfinjectable Transition

to lower cost site of care Living with RA for over 15 years with significant joint deformities RA (Rheumatoid Arthritis) PA (Prior Authorization) This slide contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health and/or one of its affiliates. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 9 Flexible Strategies Can Help Deliver on Your Trend Management Goals Illustrative Trend Specialty Guideline Management 3% Site of Care

3% Specialty Formulary 2% Generic Programs 1% Pricing Models 1% Exclusive Network 1% Remaining Trend 9% Comprehensive Trend Management Tools Source: CVS/caremark Specialty Client Solutions and Trend Management, 2013, internal analyses for estimated program savings.

Savings will vary based upon a variety of factors including things such as plan design, demographics and programs implemented by the plan. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 10 Agenda 1. The Challenging Health Care Environment 2. Advancing Your Specialty Strategy with Condition-Level Trend Management 3. Advancing Your Specialty Strategy with Complete Patient Care 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 11 Understanding the Fragmented Specialty Patient Experience My local pharmacist cant help with my medication I cant wait at home for my medication to be delivered

How do I start a medication that I need to inject? 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 Is there an easier way to refill my medication? ? Who can answer my questions about my symptoms? Its hard to get to the hospital for my infusion 12 Up to 10 Percent of Your Health Care Spend is

for 1 Percent of Patients with Rare Conditions COMPLEXITY OF RARE CONDITIONS RARE CONDITIONS Only 1 in 4 is on a specialty medication1 3 out of 4 have at least one comorbidity1 1 in 3 are admitted to a hospital each year1 1 in 2 visit the ER each year1 CIDP (Chronic inflammatory demyelinating polyneuropathy). ER (Emergency room). *Medical and pharmacy 1. Accordant Data Warehouse, All Medical and Pharmacy Claims incurred through 12/31/12 2. Accordant Comprehensive Data Warehouse; SQL Server 2008. Greensboro, NC: care management Health Services, a CVS Caremark Company; 2013. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 13 Condition Profile: Cystic Fibrosis is a Costly, Life-altering Disease WHAT IS CYSTIC FIBROSIS (CF)? RARE AND SERIOUS Life-threatening inherited genetic disorder

Affects the cells that produce mucus, sweat and digestive juices resulting in thick, tenacious mucus Organs most affected are lungs, pancreas and intestines Chronic, progressive disease with median survival age of early 40s About 30,000 people in the U.S.1 Most common in Caucasians 1 Common complications of CF include chronic lung infections and nutritional deficiencies. 1. http://www.cff.org/AboutCF/, accessed April 24, 2015 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 14 Patient Example: Coordinated Support for Cystic Fibrosis Teenager with cystic fibrosis is taking more control of his own treatment but facing challenges SPECIALTY PHARMACIST Explains how to use his nebulizer Reinforces the

importance of taking medication as prescribed RARE DISEASE CARE MANAGEMENT NURSE Helps him make smart food and exercise choices to help alleviate symptoms Explains danger of smoking with cystic fibrosis Helps him access an oscillating vest for home Provides support and encouragement Together, we help members feel less like patients and more like people. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 15 Enhanced Member Experience: Clinical Expertise and Easier Access Innovative refill, tracking and communication tools 24/7 access to clinical support Patient choice for prescription delivery

Embedded support from experienced nurses Convenient, safe infusion options These options are available based on programs selected. Member access to CVS Health enterprise assets may vary based on programs selected by the plan and utilized by the member. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 16 Appendix 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary Biosimilars That May Significantly Affect the Treatment Paradigm Rituxan $3.0B Epogen $2.8B Herceptin $1.7B

Humira $3.5B Neulasta $3.3B 2015E 2016E Remicade $3.5B 2018E Avastin $2.7B 2019E Year of anticipated patent expiration Source: CVS/caremark internal data, 2014. This slide contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health and/or one of its affiliates. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 18

Successful Specialty Management Requires Exclusion Formularies With Clinically Appropriate Alternatives PROACTIVE SPEND CONTROL Exclusions in 12 specialty classes; more expected each year EFFECTIVE BEHAVIOR CHANGE Preferred Product Non-preferred Product Integrates preferred drug and generic drug strategies Day-one control of new products and line extensions until reviewed Avoids approval of costly new drugs without clinical advantages Tiered Formulary Exclusion Formulary Up to 4% savings with fewer than 0.2% of members affected* Note: % Market Share (totals to 100%) *4% savings in select classes: Gross pharmacy savings include rebate impact. Client savings may vary by plan design, pricing arrangement, drug mix and at-risk market launches. Member savings will vary based on several factors, some of which include plan design, plan performance, etc.

2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 19 Maximizing Generics: RA RA TREATMENT Triple generic therapy: <$500 per month DAS28 MEAN SCORE Biologic combination therapy: ~$3,000 per month WEEKS Source: Therapies for Active Rheumatoid Arthritis after Methotrexate Failure. James R. ODell, M.D., Ted R. Mikuls, M.D., M.S.P.H., Thomas H. Taylor, M.D., Vandana Ahluwalia, M.D., Mary Brophy, M.D., M.P.H., Stuart R. Warren, J.D., Pharm.D., Robert A. Lew, Ph.D., Amy C. Cannella, M.D., Gary Kunkel, M.D., Ciaran S. Phibbs, Ph.D., Aslam H. Anis, Ph.D., Sarah Leatherman, M.A., and Edward Keystone, M.D., for the CSP 551 RACAT Investigators. The New England Journal of Medicine, July 25, 2013. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 20 Infusion Therapy for Specialty Conditions: Selecting Optimal Site of Care is Imperative

INFLIXIMAB (REMICADE), STANDARD DOSING OF 100 KG PATIENT3 INFUSED DRUGS are estimated to account for $35 billion of the specialty market1 Up to 33% of pipeline make up as much as 33% of specialty drugs in the pipeline2 1. EvaluatePharma. 2. EMD Serono Specialty Digest. 3. CVS Caremark Internal Data, 2014. This slide contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 21 Managing HCV in 2016: Comprehensive Approach Maximizes Value CLINICAL CLIENT Harvoni and Sovaldi provides treatment options for all genotypes

Lower net cost; aggressive contracting, fewer agents, shorter therapy duration Drug selection supports adherence: Contract may allow clients to manage utilization with PA or medical exception Harvoni generally well tolerated and taken once daily No member disruption for patients currently on therapy Shorter treatment duration may decrease fall-off and out-of-pocket expenses PRESCRIBER Harvoni typically prescribed as mono-therapy: typically fewer side effects and concerns for drug interactions Simplest therapy available: Fewer drug interactions and side effects without additive therapy requirements Less potential for physician disruption:

Harvoni is the current market leader HCV (Hepatitis C Virus) This slide contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health and/or one of its affiliates. 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary 34400 22 THANK YOU UHIA! QUESTIONS? 2015 CVS Health and/or one of its affiliates: Confidential & Proprietary

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